STATE 


ADVANTAGES 

MUNICIPAL 


OF 

LEAGUES 


BY 

ALLEN  RIPLEY  FOOTE 

Editor:  Public  Policy 


Erom  Public  Policy,  March  24.  1Q02. 


PUBLIC  POLICY  PUBLISHING  CO.. 
CHICAGO. 


TISOl 


Digitized  by  the  Internet  Archive 
in  2018  with  funding  from 

University  of  Illinois  Urbana-Champaign  Alternates 


https://archive.org/details/advantagesofstatOOfoot 


CONTENTS. 


Advantages  of  State  Municipal  Leagues .  i 

Co-operation  Is  the  Cause  and  Result  of  Civilization....  i 

Progress  Cannot  Be  Made  Without  Co-»operation .  2 

Why  Public  Administration  Is  Less  Efficient  than  Private 

Management .  3 

Municipalities  Should  Co-operate  for  Mutual  Benefit....  6 
Measures  that  Should  Be  Enacted  Into  Law .  10 


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V 


RESOLUTIONS  OF  THE  LEAGUE  OF  OHIO  MUNICI¬ 
PALITIES. 


The  following  resolution  was  adopted  by  the  League  of 
Ohio  Municipalities  at  its  fifth  annual  meeting,  Columbus, 
February  4  and  5,  1902. 

Resolved,  That  the  League  of  Ohio  Municipalities  approves 
the  principle  of  home  rule  in  taxation ;  home  rule  for  munici¬ 
pal  government ;  a  system  of  public  accounting,  prescribed  and 
audited  by  authority  of  the  state,  and  a  measure  authorizing 
municipalities  to  pay  their  proportionate  shares  of  the  expenses 
of  state  municipal  conferences  and  of  sending  delegates  to  the 
same. 


ADVANTAGES  OF  STATE  MUNICIPAL 

LEAGUES/ 


BY  ALLEN  RIPLEY  FOOTE,  EDITOR  PUBLIC  POLICY, 

CHICAGO. 


CO-OPERATION  IS  THE  CAUSE  AND  RESULT  OF  CIVILIZA¬ 
TION. 

As  men  progress  in  civilization  it  becomes  increas¬ 
ingly  more  natural  for  them  to  co-operate,  and  they 
find  an  increasing  number  of  objects  which  they  can 
best  promote  by  co-operating.  Co-operation  is  there¬ 
fore  at  once  the  cause  and  the  result  of  civilization. 

The  co-operative  movement  was  commenced  by  the 
first  human  beings  who  grouped  themselves  for  the 
purpose  of  protecting  one  from  attacks  by  brutes  in  ani¬ 
mal  and  human  form,  with  the  fighting  strength  of  all. 
From  that  beginning  the  civilized  world  has  been 
evolved.  To-day  the  methods  and  advantages  of  co¬ 
operation  are  so  well  defined  and  understood  the 
tendency  toward  co-operation  has  acquired  the  force  of 
natural  law.  It  has  seized  upon  every  form  of  activity 
and  for  every  purpose — social,  educational,  religious, 
charitable,  industrial,  commercial,  financial  and  govern¬ 
mental.  This  great  American  republic  is  composed  of 
and  contains  co-operative  organizations  so  numerous 

i  ■  -  ■  ■■  ■ 

1.  An  address  before  the  League  of  Ohio  Municipalities  at  Its 
annual  meeting,  Columbus.  February  4  and  6,  1902. 

1 


f 


the  cataloging  of  them  is  impossible.  Its  political  or¬ 
ganization  is  a  system  of  governments  within  govern¬ 
ments.  Its  social,  business  and  political  activities  are 
developed,  maintained  and  carried  on  by  the  number¬ 
less  organizations  for  mutual  purposes,  with  or  with¬ 
out  pecuniary  profit  as  an  objective  point.  Every 
movement  for  the  promotion  of  the  general  welfare; 
for  bettering’ the  conditions  of  those  employed  in  any 
vocation ;  for  the  suppression  of  evil  and  for  the  doing 
of  good  is  organized  in  some  form  of  co-operation,  and 
the  inherent  right  of  mutual  protection  through  organi¬ 
zation  is  proclaimed  as  the  natural  right  of  every  man. 

PROGRESS  CANNOT  BE  MADE  WITHOUT  CO-OPERATION. 

Every  gain  for  the  individual  and  the  general  wel¬ 
fare  is  a  result  of  co-operation.  Every  person  who 
fails  to  co-operate  with  those  of  his  belief  or  vocation 
is  an  obstruction  inothe  pathway  of  progress.  The 
vocation  that  is  not  intelligently  organized  and  di¬ 
rected,  inevitably  falls  behind  in  the  march  of  improve¬ 
ment.  The  community  that  fails  to  organize  its  public 
business  upon  the  lines  of  the  best  business  organiza¬ 
tions  is  certain  to  have  an  inefficient  and  expensive  gov¬ 
ernment.  The  man  who  does  not  educate  his  brain  is 
self-condemned  to  expend  ten  times  the  physical  force 
he  otherwise  would  to  provide  for  the  bare  necessities 
of  life.  The  employer,  public  or  private,  who  does  not 
provide  those  in  his  service  with  the  best  possible 
means  and  opportunities  for  becoming  experts  in  their 
vocations  deprives  himself  of  a  substantial  profit,  be¬ 
cause  he  strangles  the  source  of  profit  by  the  close- 
fisted  clutch  with  which  he  holds  his  money.  Every 

2 


progressive  man  is  an  active  member  of  one 'or  more 
organizations,  designed  to  promote  the  interests  of  his. 
vocation,  whether  he  be  workingman  or  employer. 
Every  progressive  and  sound  business  organization 
aids  in  maintaining  associations  for  the  promotion  of 
the  welfare  of  its  line  of  business.  It  send  to  the  an¬ 
nual  and  special  meeting  of  such  associations,  at  its 
own  expense,  its  chief  officers,  managers,  heads  of  de¬ 
partments  and  superintendents.  Such  expenses  are- 
universally  recognized  as  being  good  investments.  All 
this  is  true  in  every  domain  of  voluntary  action.  Is 
there  any  reason  why  it  should  not  be  as  true  in  the 
development  and  promotion  of  efficiency  in  the  admin¬ 
istration  of  public  business? 

WHY  PUBLIC  ADMINISTRATION  IS  LESS  EFFICIENT  THAN 

PRIVATE  MANAGEMENT. 

As  is  well  known,  I  have  always  opposed  municipal 
ownership  and  operation  of  public  service  industries  on 
the  ground  that  public  management  is  necessarily  less 
efficient  than  private  management,  because  it  eliminates 
the  factor  of  self-interest,  and  for  this  reason  it  is  im¬ 
possible  for  the  people  to  secure  an  economic  gain  by 
transferring  an  industry  from  private  to  public  own¬ 
ership  and  operation.  After  reading  my  testimony 
given  to  the  United  States  Industrial  Commission  on 
the  subject  of  uniform  accounting  as  a  means  of  regu¬ 
lating  public  service  industries.  Professor  Frank  Par¬ 
sons  wrote  me,  asking  the  following  question : 

‘‘Do  you  think  it  possible  for  men  to  learn  to  work 
as  well  for  public  spirit  and  co-operative  benefit,  as  for 
private  profit  and  loss?’' 


3 


To  this  question  I  wrote  the  following  answer: 

Men  will  ''work  as  well  for  public  spirit  and  co¬ 
operative  benefit  as  for  private  profit  and  loss’"  when 
social  conditions  give  them  a  proper  inducement  so  to 
do.  The  principle  of  self-interest  is  not  confined  to 
money-making.  It  is  present  and  is  an  efifective  force, 
inducing  and  directing  energy  to  the  accomplishment 
of  any  purpose  from  which  one  derives  satisfaction. 
All  men  must  have  the  means  of  a  comfortable  living 
if  they  are  to  serve  the  public  well.  Add  to  this  the 
inducement  of  a  certainty  of  civic  honor,  or  military 
glory,  and  the  public  has  and  is  now  obtaining  the 
service  of  ability 'of  the  highest  order  in  its  judiciary 
and  army  and  navy,  for  a  money  consideration  far. be¬ 
low  the  commercial  value  such  abilitv  would  have  if 
applied  with  equal  intelligence,  skill  and  continuity  of 
purpose,  to  mere  money-making.  Satisfaction  in  these 
cases  is  not  derived  from  the  money  payment,  but  from 
the  social  distinction  and  popular  appreciation.  Those 
who  seek  satisfaction  in  such  compensations  are  stim¬ 
ulated  to  action  by  the  force  of  self-interest  as  power¬ 
fully  as  they  could  be  if  they  sought  satisfaction  in 
money-making  only.  As  men  become  civilized  the 
sources  from  which  they  derive  satisfaction  will 
change.  This  change  will  be  in  the  direction  of  nobility 
of  service  for  the  general  welfare.  The  more  intelli¬ 
gent  people  become,  the  more  will  they  be  certain  to 
accord  reasonable  compensation  and  high  appreciation 
to  those  who  serve  them  well  in  the  vocations  of  peace 
as  they  have  done  in  the  vocations  of  war.  The  day 
will  come  when,  instead  of  one  man  saying,  "It  is  a 
disgrace  for  a  man  to  die  rich,”  all  intelligent  people 

4 


will  deem  it  a  disgrace  for  a  man  to  be  rich,  as  the 
term  ‘'rich’'  is  popularly  used.  The  products  of  life 
are  property  and  character.  Property  is  the  product 
of  the  physical  life  of  the  body.  Character  is  the 
product  of  the  spiritual  life  of  the  soul.  We  know  the 
body  is  perishable;  so'  is  property.  We  believe  the 
soul  is  indestructible;  so  is  character.  That  man  who 
exchanges  character  for  property  trades  in  uneven 
balance  the  priceless  gem  of  eternal  good  for  the  vanity 
of  a  perishable  bauble.  Give  men  correct  standards  to 
work  by,  place  them  in  service  under  conditions  that 
will  make  every  man  certain  of  obtaining*  all  the  com¬ 
pensation  in  money,  and  all  the  satisfaction  in  distinc¬ 
tion  to  which  he  can  claim  a  just  title  by  virtue  of  his 
service  record,  and  the  factor  of  self-interest  will  not 
be  eliminated  from  the  public  service  problem.  It  will 
be  preserved  and  directed  to  the  winning  of  satisfac¬ 
tion  from  other  sources  than  money-making.  To  the 
extent  in  which  this  is  done  men  will  “work  as  well 
for  public  spirit  and  co-operative  benefit  as  for  private 
profit  and  loss.”  Establish  a  condition  under  which, 
if  yon  please,  a  waterworks  superintendent  will  know 
that  his  service  record  will  be  known  to  everv  munici- 
pality  in  the  state,  in  the  whole  country,  and  that  the 
only  influence  or  power  that  can  advance  him  from 
the  management  of  the  smallest  to  that  of  the  largest 
works  is  the  intrinsic  value  of  the  merit  he  writes  into 
his  own  record,  and  you  have  a  condition  under  which 
the  public  will  be  as  faithfully  and  as  economically 
served  as  it  is  possible  for  such  service  to  be  rendered 
for  a  private  corporation.  Such  a  condition  cannot 
exist  without  a  scientific  merit  and  accounting  system, 

5 


by  means  of  which  each  man  will  write  his  own  in¬ 
delible  record  in  an  open  book  of  life. 

Until  correct  standards  are  established  for  public  ac¬ 
counting  we  have  no  correct  standards  by  which  to 
measure  the  efficiency  of  private  operation.  When 
public  accounts  are  correctly  standardized,  we  can  then 
require  private  corporations  to  conform  to  these  stand¬ 
ards  and  demonstrate  their  claim  to  superior  efficiency. 
So  long  as  they  can  prove  their  superior  efficiency,  so 
long  will  there  be  no  correct  economic  reason  for  trans¬ 
ferring  their  business  from  private  to  public  owner¬ 
ship  and  operation.  A  business  held  by  private  cor¬ 
porations  under  these  conditions  will  not  be  held 
against  the  general  welfare. 

MUNICIPALITIES  SHOULD  CO-OPERATE  FOR  MUTUAL  BEN¬ 
EFITS. 

If  the  administration  of  municipal  governments  is 
ever  to  become  as  efficient  as  the  managements  of  pri¬ 
vate  corporations  they  must  follow  the  same  methods 
of  development  and  improvement.  All  business  men 
know  the  methods  followed  by  great  corporations  to 
promote  efficiency  in  the  management  of  the  various 
manufacturing  plant  or  public  service  industries  un¬ 
der  their  control.  The  central  authority  prescribes  a 
uniform  system  of  accounting  and  reporting  which  en¬ 
ables  exact  comparisons  to  be  made  of  every  detail  of 
business  management.  There  is  no  subterfuge  possi¬ 
ble  in  their  system  of  accounting  and  reporting  as  to 
the  cost  of  any  operation  or  product.  The  commercial 
life  of  the  organization  depends  upon  its  managers 

knowing  the  truth.  When  this  system  of  accounting 


and  operation  has  been  brought  into  use  the  superin¬ 
tendents,  heads  of  departments  and  managers  are  called 
to  meet  in  frequent  conferences  for  the  examination 
and  discussion  of  these  reports.  Each  official  is  re¬ 
quired  to  explain  why  the  showing  of  a  particular  de¬ 
tail  under  his  management  is  not  as  favorable  as  under 
the  management  of  others.  The  accounting  system  be¬ 
ing  identical  a  manager  cannot  gain  credit  or  escape 
censure  by  juggling  with  the  figures.  There  they  are, 
produced  under  an  identical  system,  in  every  case,  and 
credit  or  censure  is  given,  not  by  favor,  but  by  the 
records.  Such  comparisons  lead  tO'  improvements 
whenever  improvement  is  possible.  The  unfavorable 
showing  is  accounted  for  either  by  conditions  for  which 
the  manager  is  not  responsible  or,  if  this  is  not  the 
case,  he  is  shown  how  tO'  manage  his  work  as  efficiently 
as  it  is  managed  by  others.  If,  after  being  shown  how 
to  do  it  he  fails  to-  bring  his  work  up  to-  the  standard, 
he  is  relegated  to  the  scrap  pile  along  with  other  in¬ 
efficient  machinery.  This  is  the  penalty  of  incompe¬ 
tency  in  private  business.  It  must  be  the  penalty  of 
incompetency  in  public  business.  A  system  that  will 
establish  the  merit  and  guarantee  the  advancement  of 
the  competent  will  as  surely  expose  the  demerit  and 
secure  the  removal  of  the  incompetent.  To  enable  mu¬ 
nicipalities  to  co-operate  effectively  for  mutual  bene¬ 
fit,  the  state  must  perform  the  functions  of  a  controlling 
corporation,  which  it  is  in  fact,  and  prescribe  the  sys¬ 
tem  of  accounting,  and  it  must  audit  the  same.  In  no 
other  way  can  uniformity  in  accounting  and  reporting 
by  all  municipalities  in  the  state  be  established.  This 
done,  the  state  should  provide  by  general  law  for  the 

7 


expenses  of  a  state  organization  of  municipalities  by 
authorizing  each  municipality  to  make  an  annual  ap¬ 
propriation  for  its  proportionate  share,,  and  to  pay  the 
actual  expenses  incurred  in  attending  annual  meetings 
by  its  superintendents,  heads  of  departments,  execu¬ 
tive  officials  and  delegates  selected  from  its  council.  • 
Under  such  conditions  every  municipality  would  be¬ 
come  a  member  of  the  state  organization  and  would 
represented  in  its  annual  meetings  by  the  men  who 
need  to  learn  if  anyone  in  the  state  is  managing  their 
special  branches  of  the  public  service  more  efficiently 
than  they  are,  and  if  so,  how  they  do  it.  If  the  pub¬ 
lished  reports  show  a  greater  relative  cost  in  any  de¬ 
partment  or  for  any  item  in  one  municipality  than  in 
others,  the  officials  of  the  municipality  will  have  op¬ 
portunity  to  satisfy  their  competitors  why  the  excessive 
cost  is  necessary  in  their  case,  or,  failing  this,  they 
will  learn  how  to  cut  down  that  cost.  Either  result  will 
make  for  good  government  in  that  particular  munici¬ 
pality. 

The  practical  result  of  such  comparisons  and  con¬ 
ferences  will  be  to  show  that  no  municipality  is  best  in 
all  things  nor  none  worst  in  all  things.  In  some  things 
each  may  be  best  and  in  some  things  worst.  The  es¬ 
sential  thing  is  to  find  where  the  best  work  is  being 
done,  who  is  doing  it  and  by  what  methods  he  has  suc¬ 
ceeded  in  excelling.  Equipped  with  this  knowledge, 
every  representative  can  return  to  his  municipality  pre¬ 
pared  to  improve  the  efficiency  of  his  department. 
From  such  work  good  municipal  government  is  certain 
to  be  evolved.  There  is  not  an  honest  and  intelligeni 
mind  in  this  state  that  can  maintain  that  the  benefits 

8 


to  be  derived  by  municipalities  from  a  system  of  ac¬ 
counting,  reporting  and  conferences,  such  as  is  herein 
advocated,  will  not  be  productive  of  economies,  im¬ 
provements  and  benefits  worth  to  the  people  an  hun¬ 
dred  times  the  costs  involved.  Talk  about  saving 
money  for  consumers  by  owning  and  operating  public 
utilities !  In  this  system  of  perfecting  the  adminis¬ 
tration  of  municipal  afifairs  there  is  opportunity  to  save 
more  money  for  municipal  taxpayers  than  the  entire 
net  income  of  all  the  public  service  utilities  operating 
within  their  limits.  And  there  is  still  another  value — 
this  system  will  stimulate  civic  pride.  It  will  make  it 
honorable  for  capable  men  to  serve  the  municipality 
and  will  demonstrate  their  worth  so  they  can  afford  to 
enter  the  public  service  as  a  profession,  and  devote  their 
lives  to  the  service  of  the  public.  This  system  will 
make  it  possible  for  men  to  learn  to  ‘Svork  as  well  for 
public  spirit  and  co-operative  benefit  as  for  private 
profit  and  loss.'"  Until  this  system  is  well  established 
private  corporations  have  nothing  to  fear  from  munici¬ 
pal  competition  in  the  ownership  and  operation  of  pub¬ 
lic  service  industries,  because,  under  conditions  as  they 
now  exist,  and  as  they  will  continue  to  exist  until  the 
practical  measures  for  increasing  the  efficiency  of 
municipal  administrations  herein  advocated  are  adopted 
and  carried  into  effective  operation,  municipal  owner¬ 
ship  and  operation  will  be  ownership  and  operation  by 
the  least  capable  in  competition  with  the  most  capable. 


9 


MEASURES  THAT  SHOULD  BE  ENACTED  BY  THE  LEGISLA¬ 
TURE  NOW  IN  SESSION. 

1.  A  bill  to  provide  for  and  establish  a  uniform  sys¬ 
tem  of  accounting  for  all  public  accounts,  to  be  pre¬ 
scribed  and  audited  by  the  auditor  of  state. 

Such  a  bill  has  been  proposed  by  the  Ohio  State 
Board  of  Commerce.  It  is  herewith  submitted  to  the 
League  of  Ohio  Municipalities  for  indorsement,  and  to 
secure  axtive  co-operation  in  aiding  its  enactment. 

2.  A  bill  authorizing  all  municipalities  to  pay  from 
public  funds  their  proportionate  share  of  the  expenses 
of  an  annual  municipal  conference  of  the  League  of 
Ohio  Municipalities  and  the  expenses  incurred  in  at¬ 
tending  this  conference  by  superintendents,  heads  of 
departments,  executive  officials  and  delegates  selected 
from  municipal  councils. 


10 


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